The global telecom network market is anticipated to witness substantial growth over the forecast period owing to increasing demand for telecom services. Increasing deployment of 4G and LTE infrastructure is expected to drive market growth. Additionally, growing needs to provide telecom services in remote areas worldwide are expected to further fuel the telecom network market.
Cost and increased competition are major challenges as Chinese market players are gaining market through low-priced product and affecting the market share of other players. Equipment standardization leading to intense competition is expected to hamper the telecom network market. Standardized and commoditized network components lead to more competition among network component suppliers, thus lowering bargaining position of the suppliers. Telecom network market players are facing strong competition from low-price and refurbished telecommunication network equipment. Increasing bargaining power of telecom service market players and increased demand from them to deliver products quickly at lower costs may hamper the global telecom network market expansion. Telecom network equipment manufacturers consistently face the challenge of maintaining balance between supporting existing portfolio of products and innovating for the future, and a balance between investing on next-generation technologies and legacy products.
Telecom network companies are looking way to differentiate devices and equipment by offering pay as you grow capacity- and capability-based software offering. Reducing product fulfillment costs, easy device trials, and using virtual appliances to avoid physical hardware costs are expected to provide positive avenues to market growth. Telecom network market player can leverage their scale of operations and size to offer one-stop-shop solution for telecom network equipment, which can provide competitive advantages.
Advancement in telecom network software, specifically Software-Defined Networking (SDN) and Network Functions Virtualization (NFV) provide the ability to considerably transform the telecom network market over the forecast period. NFV and SDN technologies are synergistic and they offer programmability, lower capital expenditure/operating cost, and faster service enablement for service providers. Increasing demand for personalized services is opening market for business analytic application. Network software companies can deliver package application offering both network supports and analytics.
Global telecom network market can be classified into public switching equipment, transmission equipment, customer premises equipment, and network software market. Public switching equipment market includes analog and digital switches. Transmission equipment market includes transmission lines, multiplexers, local loops, base transceiver stations, and communications satellites. Customer premises equipment market includes private switches, moderns, local area networks, mobile phones, answering machines, land lines, teleprinters, fax machines, pagers, and routers. Asia Pacific is anticipated to be the key regional market over the forecast period; however, Europe is expected to grow at a slow rate.
Major players in the telecom network market include Ericsson, Cisco Systems, Fujitsu Ltd., Nokia Corporation, Qualcomm Incorporated, Alcatel-Lucent, ZTE Corporation, Huawei Technologies Corporation Limited, Juniper Networks, ECI Telecom Limited, Avaya, Cisco Systems, Motorola Inc., and Emerson Network Power. In June 2015, Alcatel-Lucent introduced G.fast home networking device for business and residential use that will allow service providers to accelerate the deployment of ultra broadband access. G.fast technologies allow service providers to bring gigabit broadband speeds to premises. Telecom network companies are forming strategic alliance with telecom service companies for new product development, for instance, Huawei has formed strategic alliance with China Telecom and Vodafone for new product development. In June 2015, Cisco launched new Cisco IoT system, which includes six critical pillars, network connectivity, data analytics, management and automation, fog computing, security, and application enablement platform to reduce digitization complexities. Increasing need to offer one-stop-shop solution may force telecom network market to either enhance their product portfolio by merger and acquisition or enter into strategic alliances with other companies with complementary capabilities, for instance, market has recently witnessed significant consolidation and merger and acquisition activity such as acquisition of Marconi by Ericsson, the merger of Alcatel and Lucent, and joint venture between Nokia and Siemens.
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